OTTAWA — Rushing to balance the federal books would drive the country into recession, Finance Minister Bill Morneau cautioned Tuesday — one day after admitting that he's digging a fiscal hole that's even deeper than originally planned.

Morneau was at the centre of several heated partisan exchanges that highlighted the stark philosophical difference between the Liberals and Conservatives on the importance of a balanced federal budget.

He appeared before an all-party parliamentary committee to answer questions about Monday's projections, which said next year's deficit could turn out to be more than five times bigger than was forecast just three months ago.

And if anyone had doubts about how committed Morneau is to the idea of running a deficit, he erased them Tuesday when he said that a balanced budget is the last thing the Canadian economy needs right now.

"Was he really serious when he said that running a balanced budget is going to put us in a recession?" Conservative finance critic Lisa Raitt asked, incredulous, during question period.

"I was deadly serious," an animated Morneau shot back.

The Liberals made a counter-intuitive decision during last year's election campaign when they promised to run deficits over the next three years in order to pay for infrastructure projects in order to stimulate the flagging economy.

Conservative MP Lisa Raitt asks a question during question period in the House of Commons, on Feb. 22, 2016. (Photo: Sean Kilpatrick/CP)

The Tory and NDP vows to balance the budget "at all costs" would have forced Ottawa to either significantly raise taxes or introduce tens of billions of dollars of cuts, Morneau said.

On Monday, Morneau said Ottawa is now predicting a shortfall of at least $18.4 billion next year — a shortfall that's nearly twice the $10-billion limit promised by the Liberals, and one that's widely expected to grow even more before the March 22 budget.

The Liberals, who have largely blamed the weak economy for wreaking havoc on their campaign promises, have also signalled they won't be able to live up to a key commitment to balance the books in four years.

The Liberals have many spending promises still to implement, Raitt — also a member of the finance committee — noted during Morneau's testimony.

"Do you have those numbers right, minister?" she asked. "Because so far we have not seen any kind of consistency in terms of getting the predictions correct."

Raitt also accused the Liberals of blowing through a projected surplus left behind by the former Harper government. Not so, insisted Morneau, who claimed the Tories left behind a deficit.

"Do you have those numbers right, minister? Because so far we have not seen any kind of consistency in terms of getting the predictions correct."

During the hearing, Morneau was also pressed by NDP MP Guy Caron to explain why his department included a bigger-than-usual contingency reserve of $6 billion a year in its calculations.

Was it a political move designed to lower expectations among Canadians, Caron wanted to know. No, just a cushion against economic uncertainty, Morneau explained.

Alberta to receive $251.4 million amid downturn

The federal government also confirmed Tuesday that it will provide $251.4 million to Alberta under a program designed to help provinces hit by sudden revenue downturns.

Alberta has been sideswiped by collapsing oil prices and the little-known fiscal stabilization program provides help when provincial revenues fall by more than five per cent from one year to the next.

Money from the program is allocated on a per capita basis, at $60 a person.

Newfoundland and Labrador, which has also been hit by sagging oil prices, may also qualify and the federal government has said it would quickly assess such a claim if the province applies for money.

The Saskatchewan government also explored whether it was eligible for a fiscal-stabilization payment. The province has also sustained a negative economic hit due to falling oil prices.

A provincial spokeswoman, however, said Tuesday that the more-diversified Saskatchewan economy likely failed to qualify because the government didn't suffer a five-per-cent drop in revenues, which is the criteria for federal help.